Some closing thoughts on e- procurement goals and resulting resolutions for the New Year.

December 30th, 2009

Now that we created 20 thought areas for our goals and resolutions in yesterdays post, we can focus on each of the goal areas and build our e-procurement resolutions for 2010 by adding more detail

As an example, let’s take an individual look at our  #10  procurement thought “Evaluation of low cost technology solutions”

Each and every year companies spend millions of dollars developing new business plans for the upcoming year. Basically these are the company’s New Year resolutions. Most of the fourth quarter of every year is focused on this endeavor. As we discussed in our first post of this series this means there is no excuse for not having your e-procurement goals written down.

Because of new open source software applications you should no longer have to shell out a ton of money for license fees. Your current e-procurement solution provider if using the most current technologies should not have to charge you an arm and a leg for using their application. In fact, your prices should be continuing to scale down. The need to pay increases in license fees or use fees today to have software installed behind your firewall or in a hosted environment should be compressing dramatically as a result of lower development costs for newer versions of applications based on the use of inexpensive or in some cases free open source tools. The resulting applications are then being offered in the form of Software as a Service or Cloud Computing where you use only what you need and pay accordingly.

Companies can begin to seek lower fees by simply asking their present solutions provider; why their costs have not dropped. The size of your providers IT organization adds to your providers overhead and as a result to the fees you are paying for using their tools. These organizations should be shrinking. If a current application has its roots in the late 1990’s or early in this decade you are paying more to use it as a result of the embedded cost to develop it. More current applications that use a variety of freeware tools make it possible  for today’s developers to do  multiples of the work  a single developer could accomplish as little as five to ten years ago.

Next generation applications should also include a level of intelligence that was not available five to ten years ago. Whether that is simple language versus HTML or the use of intelligent agents, the result should be easier to use applications resulting in shorter cycle times and not increases in new service offerings to compensate for reduced development costs. 
 
What this all leads to for the e-procurement knowledge worker is lower embedded development costs, lower ongoing support costs and more flexibility relative to customization requests going forward. It also means that it is easier to change providers because there is relatively no technology cost required and ramp up time is almost immediate. This in and of itself will hold your current solution provider accountable to the service levels you require.

Have this discussion with your e-procurement solution provider; it may save you thousands or dollars.

We appreciate and look forward to your comments

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